James Park, CEO of Fitbit, disclosed during his presentation at TechCrunch Disrupt in San Francisco that his company is considering expanding deeper into the wellness services industry.
The San Francisco company has reportedly been having financial difficulties as of late, and there are even speculations that they are searching for a buyer. According to an article published in Reuters, some well-known companies, such as Google, as well as a variety of private equity groups have expressed interest in the opportunity. Around two weeks ago, Fitbit shares increased by almost 20% in response to the rumours, but they have given back the majority of their profits since then.
Fitbit debuted Versa Lite back in March. It was hoped that the introduction of a more affordable model of the already popular smartwatch would stimulate more sales, but this does not appear to have been the case.
During the most recent results call, the company announced a reduction in its sales forecast for 2019. Surprisingly, sales of smartwatches dropped by 27 per cent between April and June of this year compared to the same time period in the previous year. Despite this, revenue from trackers rose by 51% compared to the previous year. It is currently hoped that the newly released Versa 2 will be a better seller than its predecessor, the Versa Lite.
In addition to that, the organisation is continuing to look into additional potential options. In addition, it is trying to expand its presence in the lucrative health care industry. It was disclosed on TechCrunch that Fitbit gadgets will be fully covered by 59 Medicare Advantage plans in 2020, up from 42 programmes in 27 states. Currently, Fitbit devices are only fully covered by 42 Medicare Advantage plans.
According to Park, “healthcare is such a large industry that the only way we can truly provide all of these benefits to individuals is through partnerships.”
There is going to be a lot of collaboration in the future, whether it be with insurance firms or with other technology companies.
In addition to that, the sale of software presents still another possibility to generate cash.
At the conference, Fitbit’s co-founder and chief technology officer, Eric Friedman, stated that the company generates money off of wearables at the moment, but that what matters most is what they do with the data they collect.
Along with the redesign of its app, the company has just introduced a new monthly subscription service. The purpose of this is to provide people with more tools for managing their health and wellness. The cost of the service is $9.99 a month or $79.99 for the entire year. Currently, it can be purchased in 17 different nations in the English language, and in 2020, additional languages and countries will be added.
What you need to know about the premium edition of the Fitbit app, which is called Fitbit Premium
The paid edition of the app includes a variety of guided health and fitness programmes, new and improved health tools, advanced sleep features, thousands of video and audio exercises led by professionals, and more. All of this is a part of Fitbit’s larger strategy to transition away from a revenue source that is entirely reliant on the sale of hardware.
“We introduced a premium, and we are offering more services moving forward,” says Park. “We are excited about the future.”
“It is essential for the long-term success of these services that our clients derive value from them and that they be successful.”
Given the abundance of subscription services for health and fitness that are currently available from many different providers, it needs to be seen whether or not this method can be successful. Despite this, Fitbit is sure that their customers will join up for the new service, despite the fact that the bulk of their customers is “already paying for a health-tracking service” elsewhere.